Unique Features of the Multiple Peril Program - Cont.

The Standard Reinsurance Agreement between insurers and the FCIC is designed to transfer much of the crop insurance risk to the Federal government. Previously, the SRA required insurers to reinsure their exposures by county and crop. Beginning in 1998, it permitted individual policies to be reinsured. Unlike the expense reimbursement percentage, the SRA is negotiated between RMA and private insurers.

In situations in which RMA broadens the MPCI coverage subsequent to the final date for policy revisions, insurers may experience greater losses than they would have otherwise anticipated. These revisions may also arise too late for insurers to cede the affected exposures to the SRA. These situations are negotiated between RMA and the insurance industry, with an occasional recourse to litigation.